Business services providers thrive by solving complex operational challenges for their clients, allowing them to focus on their secret sauce. Furthermore, the demand for their offerings is rising as more clients outsource non-core functions, a trend that has enabled the industry to return 9.2% over the past six months. At the same time, the S&P 500 was up 6.8%.
Although these companies have produced results, only a handful will thrive over the long term as AI-driven upstarts are rapidly taking share from the incumbents. On that note, here are two services stocks boasting durable advantages and one we’re swiping left on.
One Business Services Stock to Sell:
Vestis (VSTS)
Market Cap: $1.76 billion
Operating a network of more than 350 facilities with 3,300 delivery routes serving customers weekly, Vestis (NYSE: VSTS) provides uniform rentals, workplace supplies, and facility services to over 300,000 business locations across the United States and Canada.
Why Should You Sell VSTS?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 2.8% annually over the last two years
- Estimated sales for the next 12 months are flat and imply a softer demand environment
- Earnings per share have contracted by 19.7% annually over the last four years, a headwind for returns as stock prices often echo long-term EPS performance
At $14.31 per share, Vestis trades at 26.5x forward P/E. Read our free research report to see why you should think twice about including VSTS in your portfolio.
Two Business Services Stocks to Watch:
IMAX (IMAX)
Market Cap: $2.32 billion
Originally developed for World Expo '67 in Montreal as an innovative projection system, IMAX (NYSE: IMAX) provides proprietary large-format cinema technology and systems that deliver immersive movie experiences with enhanced image quality and sound.
Why Are We Backing IMAX?
- Annual revenue growth of 23.5% over the last five years was superb and indicates its market share increased during this cycle
- Free cash flow margin jumped by 23.5 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
- Returns on capital are increasing as management’s prior bets are starting to bear fruit
IMAX’s stock price of $40.49 implies a valuation ratio of 25.1x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
Accenture (ACN)
Market Cap: $102.8 billion
With a workforce of approximately 774,000 people serving clients in more than 120 countries, Accenture (NYSE: ACN) is a professional services firm that helps organizations transform their businesses through consulting, technology, operations, and digital services.
Why Could ACN Be a Winner?
- Annual revenue growth of 8.8% over the last five years beat the sector average and underscores the unique value of its offerings
- Massive revenue base of $73.1 billion makes it a well-known name that influences purchasing decisions
- Industry-leading 35% return on capital demonstrates management’s skill in finding high-return investments
Accenture is trading at $128.72 per share, or 8.6x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
